TY - JOUR
T1 - Poverty Traps With Local Allocation Tax Grants In Japan
AU - Doi, Takero
N1 - Copyright:
Copyright 2010 Elsevier B.V., All rights reserved.
PY - 2010/12
Y1 - 2010/12
N2 - This essay investigates poverty traps related to Local Allocation Tax (LAT) grants in Japan. LAT grants, which are transfers of funds from the central government to local governments, make efforts for enhancing regional economic growth, due to the calculation of the LAT grants. Using a simple dynamic model, we show that LAT grants lower regional income and are a disincentive to localities to increase their estimated tax revenue. Using panel Granger (non-)causality tests, we find empirical support for asserting that there are poverty traps due to the LAT grants in Japan.
AB - This essay investigates poverty traps related to Local Allocation Tax (LAT) grants in Japan. LAT grants, which are transfers of funds from the central government to local governments, make efforts for enhancing regional economic growth, due to the calculation of the LAT grants. Using a simple dynamic model, we show that LAT grants lower regional income and are a disincentive to localities to increase their estimated tax revenue. Using panel Granger (non-)causality tests, we find empirical support for asserting that there are poverty traps due to the LAT grants in Japan.
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U2 - 10.1111/j.1468-5876.2010.00519.x
DO - 10.1111/j.1468-5876.2010.00519.x
M3 - Article
AN - SCOPUS:78649498218
VL - 61
SP - 466
EP - 487
JO - Japanese Economic Review
JF - Japanese Economic Review
SN - 1352-4739
IS - 4
ER -